LITIGATION RELEASE NO. 17911 / December 30, 2002

COMMISSION CHARGES MAXXON, INC., ITS PRESIDENT, AND TWO OTHER MAXXON EMPLOYEES WITH ANTIFRAUD VIOLATIONS AND SEEKS MORE THAN $1.5 MILLION IN ILL-GOTTEN GAINS AND A PERMANENT OFFICER AND DIRECTOR BAR AGAINST MAXXON'S PRESIDENT

The Securities and Exchange Commission today filed a civil injunctive action in the United States District Court for the Northern District of Oklahoma against Maxxon, Inc., a Tulsa-based company, and against Maxxon's President and Chief Executive Officer, Gifford M. Mabie, Jr., and two other company employees, alleging that they made materially false or misleading statements about the company and its sole product, a purported "safety syringe," and obtained more than $1.5 million in ill-gotten gains from stock they sold at fraudulently inflated prices.

The Complaint alleges that from at least 1997 through 1999, Maxxon and Mabie made materially false or misleading statements on television, in press releases, on the Internet, and in other media. Among other things, the Complaint alleges, Maxxon and Mabie falsely or misleadingly stated that the company's syringe could be produced for the same cost as a standard syringe, that the company's syringe met federal government safety standards, that Maxxon was conducting clinical trials with its syringe, that Maxxon had begun manufacturing its syringe, and that Maxxon had received orders for the syringe. In addition, the Complaint alleges, Maxxon and Mabie falsely or misleadingly stated that major health-care companies had determined that Maxxon had the best safety syringe device in the world, that a major health-care company had expressed an interest in acquiring Maxxon, and that representatives of the Swedish government were negotiating with Maxxon to build a plant, which would be paid for by the Swedish government.

The Complaint alleges that while Maxxon and Mabie made these materially false or misleading statements, Mabie sold more than 1 million Maxxon shares at fraudulently inflated prices and made profits of at least $1,541,817.59.

The Complaint alleges further that from February 20, 2002, through July 15, 2002, Maxxon, Mabie, and Thomas R. Coughlin, Jr., Maxxon's Medical Advisor, issued materially false or misleading statements in press releases concerning the status of Maxxon's 510(k) application with the Food and Drug Administration ("FDA"), in which Maxxon sought to have the FDA approve a new version of its syringe. Among other things, the Complaint alleges, Maxxon stated in an April 8, 2002, press release, "Maxxon anticipates the 510(k) application will be approved upon receipt of answers" to questions raised by the FDA. According to the Complaint, this statement was materially false or misleading because at the time, there was no reasonable basis for the statement and Mabie and Coughlin were aware of undisclosed facts undermining the accuracy of the statement. For example, the FDA in a December 19, 2001 letter, had informed Maxxon that its application was "administratively incomplete," that the application had been placed "on hold," and that the FDA wanted additional information from Maxxon before a "substantive review" of the application could begin.

Also, during this same period, the Complaint alleges, Mabie and Rhonda R. Vincent, Maxxon's Financial Reporting Manager, caused Maxxon to submit filings to the Commission that contained materially false or misleading statements regarding the status of FDA approval of the syringe.

While these materially false or misleading statements were in the market, the Complaint alleges, Mabie, Coughlin, and Vincent each sold Maxxon shares at fraudulently inflated prices, and Mabie made profits of at least $60,356; Coughlin made profits of at least $50,290; and Vincent made profits of at least $29,526.93.

The Complaint charges all of the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5, which prohibit the making of materially false or misleading statements in connection with the purchase or sale of securities. The Complaint also charges Mabie with violations of Section 5 of the Securities Act of 1933 ("Securities Act"), which prohibits unregistered sales of securities, and charges Maxxon, Mabie, and Vincent with violations of Section 17(a) of the Securities Act, which prohibits the making of materially false or misleading statements and failing to disclose material facts in the offer or sale of securities. The Complaint also charges Maxxon with violations of Section 13(a) of the Exchange Act and Exchange Act Rules 13a-1, 13a-13, and 12b-20, which prohibit the making of materially false or misleading statements in filings with the Commission, and charges Mabie and Vincent with aiding and abetting Maxxon's violations.

The Commission seeks permanent injunctions against all the defendants and disgorgement, prejudgment interest, and civil money penalties against all the individual defendants. The Commission also seeks against Mabie a statutory and equitable permanent bar from acting as an officer or director of any public company, a permanent bar from participating in an offering of penny stock, and an accounting by Mabie of all stock sales and trading profits that he received from the sale of Maxxon stock during the time of the alleged fraud.